Products October 28, 2009

New Partnership Offers a Solution for Missing Participant Accounts

A new partnership aims to help plan sponsors, their advisers, and third-party administrators to “easily manage the accounts of terminated participants, keep their savings invested in retirement, and reduce plan costs”. 

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RolloverSystems, Inc. (RSI), and San Rafael, California-based Pension Benefit Information (PBI) Pension Benefit Information (PBI) have announced a joint venture and a new offering; the Compliance Plus IRA Solution.   

The new offering combines PBI’s missing participant location services with RSI’s terminated participant inventory management and personal retirement counseling and includes: 

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  • missing participant services: a search process to locate missing participants and/or locate their beneficiaries;
  • participant communication: informs participants of their options for continuing their retirement savings and deliver required notifications and disclosures;
  • access to The Retirement Center: with personalized participant support from licensed rollover counselors who provide what the announcement describes as “objective guidance and streamlined rollover processing;”
  • safe harbor IRA: transfers the balances of unlocated and/or unresponsive participants directly to pre-approved safe harbor retirement accounts;
  • stale dated check services: reduces potential uncashed and returned checks by rolling over participants savings, according to the firms; and
  • rollover compliance report: provides documentation of the efforts made to reunite participants with their benefits that the firms said satisfies the fiduciary requirements under ERISA. 

The announcement noted that the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) allows plan sponsors to automatically roll distributions under $5,000 into a safe harbor IRA, instead of being paid out in cash. “By teaming up, we can fulfill the Department of Labor’s complex regulatory guidelines for our clients while looking after the retirement savings of their participants,” said Susan McDonald, president and owner of PBI, in a press release. 

The RSI Retirement Center, staffed with licensed rollover counselors, will provide participants with guidance and access to IRAs, even for accounts with as little as one dollar, according to the firms. If a participant’s savings roll into the automatic rollover IRA, they will have access to all the investment products within the RolloverSystems IRA network, including brands such as Fidelity, Principal, Wachovia, Janus, T-Rowe Price, and Scottrade.

Compliance October 28, 2009

FINRA Forms Social Networking Task Force

Rick Ketchum, chairman and CEO of the Financial Industry Regulatory Authority (FINRA), said the agency has formed a task force to examine how regulation can welcome new forms of communications while protecting investors.

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Speaking at the annual meeting of the Securities Industry and Financial Markets Association (SIFMA), Ketchum said the phenomenon of social networking is an example of new technologies that challenge abilities to ensure compliance with regulatory requirements. While social networking sites such as Facebook and LinkedIn provide new ways to inform and interact with broker/dealer customers, they also raise regulatory challenges. For instance, he noted that it is difficult for firms to archive social-networking communications.

FINRA has previously not released formal guidance about social networking, but has produced a podcast to help broker/dealers and registered representatives interpret rules in regards to social networking (see “FINRA, SEC Rules for Social Networking”). Ketchum said the new Social Networking Task Force is composed of industry participants “to explore how regulation can embrace technological advancements in ways that improve the flow of information between firms and their customers—without compromising investor protection.”

“Many registered representatives, particularly younger ones, want to use social networking sites to communicate with friends and potential customers,” said Ketchum, according to the speech transcript. “As currently constructed, these sites would not permit you to easily supervise these communications. For that reason, most firms prohibit their employees from using these sites for their business. Nevertheless, interest in these sites will not go unabated. Overcoming many of these challenges will require technology solutions. In fact, we are aware of new technologies that may soon enable firms to archive employee communications in order to comply with supervision and recordkeeping requirements.”


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